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FORECASTING IS DIFFICULT, especially where the future is concerned. Yet that doesn't stop pundits and other shamans from prognosticating. Often wrong but never in doubt, they go forth and issue forecasts that may have no more predictive value than a flip of a coin. Yet they will be quick to remind one and all about correct calls and forget about the rest.

I have no illusions about my prescience, or lack thereof. That recognition has served me well, especially insofar as investing is concerned, not the least because it has taught me the value of diversification. You don't need graduate-level finance courses to understand the ancient admonition against putting all your eggs in one basket.

Yet, one regularly reads various studies asserting that you should only own stocks for the long run. Except that in the past three decades or so, long-term government bonds have produced better returns than equities. But that doesn't tell you much about the future, other than it's unknowable.

It's not an either-or choice anyway. You don't have to commit to an asset class as you would a spouse. You can be polygamous, even promiscuous in your choices. Indeed, that will prove more remunerating than falling for one asset, only to drop it for another, no doubt at the worst possible time.

So, the sage, age-old advice applies. Based on the experience of recent years, everyone should own bonds as a hedge against stocks' going down. And they should hold a wad of cash and gold as a hedge against really bad things happening. Conversely, I maintain an equity position as a hedge against something going right. Hey, you never know.

In that regard, some things just may be going right. Not that I'm buying into the "green shoot" stuff, which seems largely based on the notion that things are getting worse more slowly.

For instance, initial claims for unemployment insurance slipped to 631,000 in the latest week from 645,000 the prior week and their recent peak of 660,000. But 400,000 weekly jobless claims are consistent with stagnant job growth; the current pace is half-again as much. Moreover, 6.27 million people are collecting unemployment checks, a record.

Even though everything I see and feel about this economy suggests things still are deteriorating, I have to pay attention to those people and indicators that have pointed in the right direction -- even when they've gone against the crowd (and my opinion at the time.)

One such outfit is the Economic Cycle Research Institute, whose various leading indicators actually have done just that&mdash;lead where things were headed.

For instance, ECRI's leading indicator of inflation pointed to steadily diminishing price pressures through 2007 -- while some delusional Federal Reserve officials were clamoring for higher rates to fight the oil-induced inflation hysteria. By mid-2008, the forces of deflation took hold, resulting consumer prices in March being lower than a year earlier, vindicating ECRI's call.

Now, just a day after data on gross national product confirmed the current downturn has been the worst in post-World War II era, ECRI forecast that the recession will be over by the end of the summer.

That prediction comes from ECRI's so-called Long Leading Index, which is supposed to give early signals of turning points in the economy, and its Weekly Leading Index, which consists of more timely indicators. Both have been in cyclical upturns for four months, even as its Coincident Index continues to point lower, writes Lakshman Acuthan, ECRI's managing director.

ECRI says its leading indicators go back a century and only gave one false recovery signal -- in 1930-31. But every government policy conspired to constrict the economy, from tax increases to protectionism to restrictive monetary policy while banking system collapsed. By contrast, fiscal and monetary policies are full-tilt stimulative while the need to resist trade curbs is being resisted. In other words, maybe we're learning from the disastrous mistakes of the 'Thirties.

Meanwhile, another, new and unique gauge also is pointing up. The Dow Jones Economic Sentiment Indicator edged higher in April, continuing a modest uptrend from its nadir last November.

This new index, created by Dow Jones, the publisher of Barrons.com, seeks to predict the health of the U.S. economy by analyzing the coverage of 15 major daily newspapers around the nation.

The DJ Economic Sentiment Indicator goes back to 1990, and correlates relatively well with recessions and changes in non-farm payrolls, but less well with the University of Michigan Consumer Sentiment numbers. In the recovery from the last recession, news coverage turned more positive than consumers' attitudes.

In any case, with a budget deficit approaching $2 trillion and the Fed nearly doubling the size of its balance sheet, the shock would be if the economy didn't pull out of its nosedive and start to level out.

Whether the economy can generate a self-sustaining recovery once the effects of this adrenaline shot wears off is another question. At that point, "double-dip" may supplant "green shoots" as the clich&eacute; of the moment.